Finance

Gift of Equity Calculator

Calculate the equity gift when selling a home to a family member below market value.

Appraised/Market Value ($)

Sale Price ($)

Buyer's Down Payment ($)

Additional cash from buyer (if any)

Mortgage Rate (%/yr)

Formula:
Gift of Equity = Market Value − Sale Price
Effective Down Payment = Gift + Buyer's Cash
Effective LTV = (Sale Price − Gift − Cash Down) / Market Value

How Gift of Equity Works

A gift of equity occurs when a family member sells their home below appraised value. The difference counts as the buyer's down payment, often eliminating the need for cash. Lenders accept this for FHA, VA, and conventional loans.